Synopsis
By the year 2046-47, it's anticipated that India's average per capita income could soar into high-income territory, contingent upon the continuity of growth witnessed over the last 20 years. The lesser-developed states are poised to be instrumental in this journey, necessitating tailored strategies that resonate with their unique advantages and levels of development.
Mumbai: The average per capita income of states could reach high-income thresholds by 2046-47, if the country's growth trajectories of the past two decades are sustained, Reserve Bank Deputy Governor Poonam Gupta has said.
Crucially, below-median states are projected to contribute substantially to this expansion, reinforcing the broad-based nature of India's growth story, she said in a speech at the 'Columbia Indian Economy Summit 2026' at the Raj Centre on Indian Economic Policy at Columbia University last month.
"Realising and accelerating the path to this potential, however, would require moving towards state-specific growth strategies that are anchored in local strengths, structural realities, and their respective stages of development," Gupta said.
The RBI posted the speech on its website on Monday.
India's economic growth has consistently accelerated since the early 1980s.
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Average real gross domestic product (GDP) growth has increased from 5.7 per cent in the 1980s to 5.8 per cent in the 1990s, rising further to 6.3 per cent in the 2000s, to 6.6 per cent in the 2010s, and reaching 7.7 per cent in the most recent four-year period.
"The acceleration is even more pronounced in per capita income," the deputy governor said.
From about USD 274 in 1981 and USD 306 in 1991, per capita income has risen nearly 10-fold to around USD 2,700 in 2024.
"Importantly, while it took over two decades for per capita income to double initially, it has expanded by almost fivefold in the subsequent two decades, indicating a clear structural shift in growth momentum," Gupta said.
As per the forecasts in the October 2025 World Economic Outlook (WEO) of the IMF, per capita income is projected to increase to USD 3,051 in 2026 and USD 4,346 in 2030.
She further said that states have become more prosperous than before.
"India's growth story consists of broad-based prosperity, with every state recording a significant increase in per capita gross state domestic product (GSDP) over the past two decades, indicating that progress has been nationwide rather than confined to a few states or regions," Gupta said.
This is seen both in US dollar terms as well as in constant rupee terms, adjusted for inflation.
"In the last two decades, average per capita incomes across states have surged nearly fivefold in current US dollar terms and more than threefold in constant rupees, underscoring the strength and sustained pace of India's long-term income gains," she said.
She also noted that some states have become five to ten times more prosperous over the last two decades, while others have recorded more modest gains of around three times.
"One strong correlate of the relative performance is their initial prosperity levels. Per capita income levels in more prosperous states have grown faster than in relatively less prosperous ones," Gupta said.
The fact that richer states have experienced greater prosperity than the poorer states in the past, and that this trend has not reversed, implies that income levels across states have not been converging, she added.
"Prosperity is both India's ambition and its destiny. The central question is no longer whether India will prosper, but how quickly, how broadly, and how equitably that prosperity would be shared across its states and its people," she said.
Gupta further said the pace of income divergence has weakened considerably, with the growth gap between richer and poorer states narrowing over successive decades.
Meanwhile, convergence has been faster and more decisive across a wide set of welfare and development indicators, she said, and added that lagging states are catching up, and the distribution of wellbeing across India is becoming more equal.
"Looking ahead, if growth trajectories of the past two decades are sustained, the average state per capita income could approach high-income thresholds by 2046-47. Crucially, below-median states are projected to contribute substantially to this expansion, reinforcing the broad-based nature of India's growth story," Gupta said.
Realising and accelerating the path to this potential, however, would require moving towards state-specific growth strategies that are anchored in local strengths, structural realities, and their respective stages of development, she said.
Gupta also noted that many macroeconomic policies, including monetary policy and financial sector regulation, are formulated at the national level.
At the state level, the policy space and levers available are different, though no less consequential, she said.
Strengthening all of these in a holistic framework would be important to accelerate the rate of growth of prosperity for each one of the states and thereby the national average, the deputy governor said.
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